April 17, 2014 2:03pm PT by Eriq Gardner
Record Labels Sue Pandora Over Pre-1972 Recordings
The major record labels are now suing Pandora for exploiting sound recordings made prior to Feb. 15, 1972.
Last September, a similar lawsuit was filed against Sirius XM. The subject of the lawsuit has to do with the fact that sound recordings didn't begin falling under federal copyright protection until the above date. As such, the streaming service might not be able to rely upon SoundExchange, the performance rights organization that collects digital and satellite royalties on the behalf of sound recording copyright owners. The record labels are testing this belief, now asserting New York state misappropriation claims over older music being streaming on Pandora.
"Pandora's refusal to pay Plaintiffs for its use of these recordings is fundamentally unfair," says the lawsuit. Among the artists whose songs are said to be infringed upon Pandora are Bob Dylan, The Beatles, David Bowie, Elvis Presley, James Brown and Led Zeppelin.
If the plaintiffs prevail, many of the songs could be off Pandora, as Capitol Records, Sony Music, Universal Music, Warner Music and ABKCO Music are demanding an injunction in addition to compensatory damages, punitive damages and all proceeds gained as a result of the exploitation of pre-'72 music. Pandora has more than 250 million users.
The complaint points out that Pandora features specific stations that leverage the older music including "50s Rock 'n' Roll," "60s Oldies," "Motown," "Doo-Wop," "Early Jazz," and others.
Pandora works by attempting to feed its users songs that are similar to their favorites, but the algorithm can sometimes be reliant on what users pick in the first place. For example, the lawsuit says that on the "Beatles" station, a user can expect to hear a recording from the John Lennon group approximately four times during a three-hour period.
The RIAA circulated the lawsuit on Thursday along with quotes from artists or their heirs. "It’s an injustice that boggles the mind," says Booker T. & the MG's Steve Cropper. "Just like the programmers who deserve to be paid for their work, I deserve to be paid for mine.”
The plaintiffs are being represented by the same attorneys at Mitchell Silberberg & Knupp who are representing them in the ongoing case against SiriusXM.
In the SiriusXM case, there could be important clarity on the issue of pre-'72 music coming in weeks. The plaintiffs have brought a motion for jury instruction and there is a hearing set for May 14. The satellite radio company has argued "there is no state law that requires SiriusXM (or any of the hundreds of thousands of other U.S. businesses that publicly perform music) to pay license fees for Pre-1972 Recordings."
Even if SiriusXM is wrong, and a judge says that misappropriation laws protect pre-1972 music, the defendant could assert affirmative defenses like laches, or the prejudice that has come from waiting decades before suing. SiriusXM also says a ruling would impact radio and television broadcasters, bars, restaurants and website operators using pre-'72 music.
One more point: The SirusXM case comes in a California court while the latest Pandora lawsuit was filed in New York. If federal law doesn't apply, judges in different states could come to different conclusions over the issue of pre-'72 music. At the moment, there might not be anything but costs in stopping the record labels from attempting to pursue Pandora and SiriusXM in 49 other states.
"Pandora is confident in its legal position and looks forward to a quick resolution of this matter," a Pandora spokesperson tells THR.